Abstract: The rural economy of Nepal is largely dependent on agriculture and remittances. Remittance has stood out as one of the key factors in reducing poverty, improving human capital and financing imports. This study aimed at presenting the research on the contribution of remittance to the rural economy as well as national economy in Nepal. For this, I reviewed the published and unpublished pieces of literature from various government institutions and other sources, including the World Wide Web. The information on the contribution of Remittance on the rural economy, concerning the current situation, destination ratio of GDP, has been discussed, collected systematically reviewed for discussion and conclusion. It was found that the ratio of remittance to GDP has highly increased in the nation because the increasing rate of remittance inflow is more than the increasing rate GDP. Major destinations of unskilled and semi-skilled labour are countries like Malaysia, Qatar, UAE, and Korea. The poor working conditions, lower wage level and rising cost living in the destination countries, fraud recruitment and lack of social protection are the major problems of migrants. The potential benefits of utilizing migrants’ human capital have not yet been sufficiently explored by governments. The government should perform a positive role to promote employment by inducting and adhering to economic diplomacy.

Keywords: migrant worker, remittance, rural economy, migrant, Nepal.

| DOI: 10.17148/IARJSET.2021.8103